I. EQUIPMENT (UPSTREAM SALE)
A. Year of Sale
The following information summarizes the relation and transactions
between P Company and its 90% owned subsidiary, S Company, during
On January 1, 20X2, S Company sells to P Company equipment
with a book value of $750,000 (original cost $1,350,000 and
accumulated depreciation of $600,000) for $900,000.
On the date of sale, the equipment has an estimated remaining
useful life of three years, no residual value, and is
depreciated using the straight-line method.
No other equipment is owned by S Company or P Company.
Books of P Company
Dep. Expense 300,000
Accum. Dep. 300,000
Books of S Company
Accum. Dep. 600,000
Gain on Equip. 150,000
Consolidation Working Papers
P Company and Subsidiary
for year ended 12/31/20X2